Setting up a company in the USA as a Non-Resident (IT Industry)

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Foreign Company to be Setup in USA
Webinar Series Episode 3
PRESENTED BY
Vivek Shah US Tax Expert Managing Partner
_at_Smart Accountants
Mansi Shah US Expat Tax Expert Sr. Tax Manager
_at_Smart Accountants
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Webinar Overview
Procedure to incorporate the company in USA
Purpose
Capital Transfer from India to USA
KEY Entities
Company incorporated in USA by Non resident
Compliances at Federal Level
Compliances at State Level
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What is Purpose to Set Up A Company in USA

• The main purpose of setting up a company in the
  USA is to Create Global market and Global Brand.
• Due to the favourable economic environment i.e.
  Non resident can purchase U.S. assets at lower
  prices than their home country.
• Incentives offered by federal, state and local
  governments.
• Access to new markets.

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Key Entities can setup in USA for doing a
business

• When beginning a business, you must decide what
  form of business entity to establish ?
• The most common forms of business are
•  

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Continue
C Corp. S. Corp LLC Gen. Partnership Sole Proprietor
Owners have limited liability for business debts and obligations X X X
Created by registration with state X X X
Perpetual duration X X X
Unlimited owners X X X
Owners need not be U.S. Citizens or residents X X X X
May be owned by another business entity rather than individuals X X
May issue stock X X
Owners report business profit and loss on personal tax returns X X X X

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QUESTION

• 1. Which of the following type of entity Owners
  report business profit and loss on personal tax
  returns? 
• General Partnership
• C Corporation

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Company Incorporated in USA by Non-Resident

• Here, We are are understanding that how to
  incorporate company in the USA as a foreigner,
  non-citizen or US citizen that lives outside the
  country.
• Incorporating in the United States can increase
  your companys credibility, gain access to the US
  market and investors (the worlds largest source
  of each).
• If you are located outside the United States and
  wish to form a company in the US, then there are
  TWO types of Business Entity to form

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Procedure to Incorporate the Company in USA
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QUESTION

• 2. The Registered Agent may or may not have a
  physical address in the state of formation. 
• TRUE
• FALSE

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Explanation Of Procedure

• Choose Which type of Business Entity to Form
• If any of the owners of the company are not US
  Citizens, then you have the option of either
  forming a Corporation or an LLC. Theres another
  entity type called an S-Corporation but that
  entity requires all shareholders to be US
  Citizens.
•  
• Which State to Form Your Corporation or LLC
•  
• In the United States, there are 50 States or
  Washington DC. Which state you choose will depend
  on why you are forming the company.
• Some US states are more business-friendly or
  international-friendly than others.
• In USA there are 10 best States to form an LLC or
  Corporation.

Wyoming New Hampshire
South Dakota Nevada
Alaksha Utah
Florida Delaware
Montana North Carolina
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QUESTION

• 3. Foreign person cannot be shareholder/member
  of?
• C Corporation
• S Corporation
• LLC
• None of the above

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Explanation Of Procedure

• Now, we understand that which state given how
  much benefit to the company and Owners

Wyoming Delaware Nevada
There is no state income tax and essentially no sales tax in Wyoming. There is no corporate income tax. In Wyoming State there is no franchise tax. In Wyoming Minimum requirement is to maintain a file annual report by January 1st. Wyoming offers greater benefits to smaller companies with increased privacy and fewer taxes.   While Wyoming is growing in popularity due to their lack of state corporate margin tax, Delaware offers business-friendly tax law which helps to get rid of these tax expenses. Delaware has no Sales Tax. For some of our clients that run dropshipping businesses and have suppliers in the US, this is definitely a big win for not just the business, but also for the consumers. Paying Delaware's state income tax is not needed for the people who are from different states and countries. Nevada State with no state income tax and zero to fairly low annual franchise fees. Nevada does have a number of other business licensing regulations and depending on the type of work, it may not be worth the headache.
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Explanation Of Procedure

• There are Some States Where Tax Rate is High for
  LLC Or Corporation
• Maryland
• Connecticut
• New York
• California
• New Jersey
• Now, we compare that which state is more
  beneficial for Corporating Company or LLC

California South Dakota
CA have some of the highest state level tax burdens in the US. In CA Corporate Income Tax Rate is 8.84 and State and Avg. local Sales Tax Rate is 8.25. California franchises taxed is 800 (minimum) annually. South Dakota is one of the most tax-friendly states for businesses. Corporate taxes are imposed only on banks and financial institutions. South Dakota charges no personal income tax to residents. There is no any franchise tax in South Dakota.
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Explanation Of Procedure

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QUESTION

• 4. The LLC formation can be done at state level
  by applying for? 
• Article of Organization
• EIN
• Certificate of good standing
• Apostille AOI

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Funds Transfer From India To USA

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QUESTION

• 5. Fund from foreign country is allowed under
  FEMA for which entity type
• LLC
• C Corporation

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Compliances In USA

• The need for compliance with government
  requirements only gets more important after
  forming a corporation or LLC.
• Very often the corporation or LLC was set up in
  the first place to help protect personal assets
  and provide tax-deductible benefits for owners
  and employees.
• Corporations and LLCs have both internal and
  external ongoing requirements.

 
Compliances at the Federal Level
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Continue
 
Compliances at the State Level
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Setup in USA
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